Feature

posted 2 May 2006 in Volume 9 Issue 8

Masterclass: Change management Part II

The second in a two-part masterclass exploring KM-driven change-management strategies.

By Catherine Kelly

In the first part of this two part series (Inside Knowledge, April 2006), the issues around creating a knowledge-sharing environment within organisations were addressed from two perspectives. First, from the perspective of organisational structure and second, from an organisational culture perspective.

The second and final part of this series will cover the issue from two further perspectives, namely the political standpoint and that of the so-called learning organisation.

Some management practitioners and theorists have regarded knowledge management (KM) as an aspirational ideology rather than a realistic, attainable management aim. The oft-quoted rationale for this view is that ‘knowledge is power’ and that employees will naturally utilise any available power resource to further the achievement of their own objectives – to the detriment of the organisation.

Ways to address this problem will be considered in the section, ‘The political perspective’. This will involve, first of all, a discussion of the varying natures of employment relationships and, second, an analysis of the impact of these varying relationships on knowledge-sharing practices in the organisation.

Finally, the practice of creating and maintaining a learning organisation that fosters innovation and creative thinking will be addressed in the section entitled, ‘The learning organisation perspective’.

This includes a section on challenging and breaking down ‘single-loop thinking’ (Argyris, 2005) and ‘fixed mental maps’ (Senge, 1990), in the organisational context.

Senge defines fixed mental maps as, "Deeply ingrained assumptions, generalisations or even pictures or images that influence how we understand the world and how we take action". Single-loop thinking occurs when individuals and organisations act consistently in traditional patterns, rather than continuously assessing the effectiveness of these patterns in achieving intended outcomes and incorporating changes as and when necessary.

Developing an understanding of how to manage these issues is essential in order to ensure that both the individual and the organisation maintain the ability to respond and adapt successfully to changing competitive pressures.

All of the proposals for change in this article are based on the assumption that effective organisations adhere to the key management principle of each individual within the organisation understanding clearly their areas of responsibility, authority and accountability.

The political perspective

Politics is all about acquiring and then exercising power. A definition of political behaviour is offered by Buchanan and Badham (1999) as "the practical domain of power in action, worked out through the use of techniques and influence and other (more or less extreme) tactics".

The ways in which organisations exercise power and control over employees obviously differs from organisation to organisation, and the framing of this exercise of power then affects the way in which employees respond to authority.

Etzioni (1964) produced a very useful typology of individual-organisation relationships by classifying organisations on the basis of the kind of power or authority they use to elicit compliance from their members. Figure one illustrates this model. Etzioni identified three different types of organisational power, in terms of whether they use pure coercive power, economic combined with rational-legal authority, and finally, ‘normative’ rewards or incentives. Etzioni goes on to say:

"The use of various classes of means for control purposes – for power, in short – has different consequences in terms of the nature of the discipline elicited. All other things being equal, the use of coercive power is more alienating to those subject to it than is the use of utilitarian power, and the use of utilitarian power is more alienating than the use of normative power."

Under the traditional industrial age model, the relationship that organisations have with their employees is based on economic, rational-legal or utilitarian grounds. Employees provide their skills and effort only in so far as they can see a clear economic reward for doing so, while employers only continue this relationship as long as the skills offered by the employee have sufficient value. Levels of trust are often quite low and there are usually many checks and balances on employee activities. This relationship is thus very much a conditional one, from both the employer and the employee perspective.

However, within the new organisational paradigm created by the coming of the so-called information age, enormous amounts of effort have been spent attempting to re-frame this relationship to one that is primarily normative rather than purely economic.

This is because it is recognised that the information age requires employees to work in more autonomous and intelligent ways in order to enable the organisation to adapt quickly to changing environmental and competitive pressures. In order to do this, employees need to engage with the organisational objectives at a much deeper level and to internalise an understanding and a commitment to achieving these objectives.

There is a tacit recognition that strict control structures, which may have been appropriate in the industrial age, may be too unwieldy to offer the adaptive and reactive skills required of staff for knowledge-intensive organisations to be successful.

If an organisation frames its authority around a normative exercise of power, employees in this organisation are therefore encouraged to move beyond a purely economic relationship to one that is framed around employees and employers working together in order to achieve common goals.

This re-framing, in theory, ought to enable higher degrees of trust to start to develop. In this kind of employee/employer relationship, the employee is often encouraged to identify with the intrinsic value of the organisation’s goals and objectives. There is a focus on the development of a ‘win-win’ relationship between employers and employees and the development of mutual reciprocity. Henry Tam (1998) typifies this type of employment contract as ideally working on three levels, namely the economic, the social and the moral.

However, the problem that exists here is that the majority of organisations in the Western European context still have a relationship that many of their staff regard primarily as an economic one. And, in reality, which many employers also regard in the same way. Lip service is paid to the idea of open and honest communication, and at the same time, there is a lack of transparency as to management decisions on organisational strategy and direction, as well as a lack of clarity in the psychological contract between the employee and the employer.

Rousseau and Anton (1991) define the psychological contract as the reciprocal set of expectations that individual employees, and the organisation in which they work, have of each other. The psychological contract is an unwritten contract, but also a dynamic one that must be periodically renegotiated between employees and employers.

The ostensible re-framing of this psychological contract between the employee and the employer needs to be made more explicit. Although employees and employers must work together co-operatively in achieving organisational goals, it is also clear that both the employee and the employer must continue to achieve sufficient utility from the relationship in order for it to be maintained.

This does not mean that either party owes the other life-long service. Rather, the conditions for the existence of the relationship are made explicit (including the tangible and intangible rewards), and is renegotiated as and when necessary, with the agreement of both parties – and sometimes terminated on the decision of either party, too.

Politics and KM success

If the psychological contract between employee and employer is made more explicit and honest, it will create greater levels of trust within the organisational context, as there will be more clarity around expectation on both sides. That is the theory.

With regard to KM programmes, the development of a normative, or even social and moral dimension to the relationship, is often suggested as a way forward. It has been proposed that the organisational culture should move towards enabling the development of a work relationship based on both employees and employers working in a cooperative and mutually reciprocal way.

However, a major problem here is that the reward structures in many organisations then reward people around a different set of values, predicated largely on individual achievement. Continued tenure within the organisation is measured around this aspect of an individual’s activities, rather than around a range of activities that may contribute to achieving organisational objectives.

While individual achievements and efforts must certainly be recognised and rewarded, the social dimension of work performance also needs to be addressed. There is often little measurement of performance around achievement within the social whole, in terms of employees also working effectively with other people in achieving organisational objectives.

A simple analogy to explain this more fully would be the example of the football team. Everybody within the team has an important part to play in contributing towards the aim of scoring a goal, or keeping the opposing team from scoring a goal.

Football is an extremely competitive sport for the individual players, but obviously, playing the game means playing in a co-operative way within one’s own team. On an intrinsic level, good players have to achieve a balance between working with the team as well as also expressing their own individual talents as players.

The team captain, coaches and managers act as external checks to ensure that an effective balance is maintained between these two driving forces within each individual player and across the team as a whole. Rewarding a player excessively who competes with his own team mates is obviously harmful in the long run to the team homogeneity and effectiveness, but in many organisations, this seems to be exactly what happens.

It may be necessary to reward the star ‘striker’ to a greater degree than other team members, but most of the team will accept that such a team member will deserve a certain level of higher reward for greater talent or ability.

In the same way, organisations that operate a transparent and meritocratic assessment of employee achievements, within the authority, responsibility and accountability framework, will generally be accepted as fair, as long as the grounds for assessment are clear and explicit to all within the organisation.

Therefore, the belief that KM cannot work because knowledge is power needs to be re-framed within the overall context of an organisation that measures people on their ability to collaborate, as well as on their individual achievements.

As discussed in part one of this article, the conflict between the needs of the individuals and the needs of the whole community have to be managed in ways that ensure the best possible outcome for the organisation as a whole. Making KM measures an intrinsic part of performance appraisals for staff, and including peer reviews as part of this process, are ways of ensuring that this is what happens.

The learning organisation perspective

The recent upsurge in interest in KM is part of a continuum of research into the underlying dynamics that enables an organisation to continuously learn. As knowledge is developed through learning, it is important to understand how individual learning may be absorbed into the organisation as a whole.

All organisations are composed of individuals, but is the learning that takes place at an individual level necessarily matched by learning which takes on an organisational level? Often, the answer to this question is ‘no’, particularly among larger organisations.

Argryis and Schon (1978) expressed this phenomenon as follows:

"Organisations are not merely collections of individuals, yet there are no organisations without such collections. Similarly, organisational learning is not merely individual learning, yet organisations learn through the experience and actions of individuals. What, then, are we to make of organisational learning? What is an organisation that it may learn?" (Argyris and Schon)

"Overall, organisational learning may be defined as changes in knowledge, understanding, skills and attitudes brought about by experience and reflection upon that experience within the organisation." (Hislop)

So, how do the theories and recommended practice on organisational learning, KM and change management?

Discussion of all of the recommended practices around the facilitation of organisational learning is impossible in an article of this length. It is intended, therefore, to focus on one aspect of organisational learning, namely to look at the ways in which residues of past learning embedded in organisational practice can result in a lack of flexibility and ability to change. This results in the organisation ceasing to learn, in the sense of it being able to either innovate or adapt effectively to changing external environmental needs.

The only certainty for many organisations operating in the information age is ongoing change. Organisations therefore need to be able to maintain an ongoing critical engagement with their established processes and norms in order to ensure that incremental change is built into the organisational raison d’être. How can this be achieved?

In terms of KM, Chris Argyris, one of the key theorists and practitioners behind organisational learning, argued that tacit knowledge is the "primary basis for effective management and the primary basis for its deterioration…. Actions that are skilful are based largely on tacit knowledge. Such actions become self-reinforcing of the status quo." (Argyris, 2005)

Argyris, therefore, maintains that individuals can become defensive about doing things a particular way, and may be unwilling to change or modify their actions in an ongoing learning process. Organisations can then become stuck in processes that may no longer be appropriate to their needs. Successful organisations in particular can become complacent and risk averse in their activities, repeating processes that made them successful, long after the world has moved on.

Argyris proposes that organisational rigidities are partly due to the fact that employees often adopt two different mindsets. These are composed, first of all, of what they say – ‘espoused theory’. Espoused theories are often aspirational or value statements about how people like to think they behave.

‘Theories-in-use’, second, are how people actually behave in reality. Argyris outlines his view that the most common theory-in-use (model one) has four governing values:

Achieve your intended purpose;
Maximise winning and minimise losing;
Suppress negative feelings;
Behave according to what you consider rational.

Argyris advocates challenging these model one theories-in-use by educating and socialising employees to adopt a new set of governing values, named model two theories-in-use.

This is achieved by challenging thought processes through the use of specific techniques, and thereby training employees to think differently about the ways in which they may act. Model two theories-in-use advocate the following:

Valid Information;
Informed Choice;
Vigilant monitoring of the implementation of the choice in order to detect and correct error.

This new theory-in-use therefore enables the individual to continuously learn from their experiences without feeling that the organisation will blame them for making a ‘mistake’ if a change in practice is suggested. ‘Single loop’ thinking is minimised, as individuals within the organisation reflect and learn from their experiences and fold this new learning into their individual tacit knowledge base.

In this sense, single-loop learning occurs when individuals and organisations act consistently in traditional patterns. Double-loop thinking, on the other hand, enables organisational practices to be questioned and modified, as and when necessary.

Within a learning-enabled organisation, modest ongoing failures are seen as a normal part of the learning process, as long as these failures result in an improvement in current practice. The organisation, therefore, continuously adapts and modifies behaviour, rather than repeating old or defunct patterns.

Challenging and changing inappropriate behaviour

In Peter Senge’s well-known book, ‘The Fifth Discipline’, he offers the following definition of a learning organisation:

"Learning organisations are organisations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together."

Senge’s writings have been best sellers in the management sector for a number of years and many of the recommended practices within this key text have been adopted by a range of successful organisations worldwide. The development of management practice which equips organisations with the ability and the readiness to continuously adapt to meet operational challenges is a key aim for the learning organisation theorists and practitioners.

To anyone interested in the current KM practice, it will be obvious that many of the ideas around KM are drawn, to some extent, from learning organisation theories. Many of these theories have been incorporated into best practices for modern management, including for example, the following recommendations for creating a learning organisation proposed by Pedler, Burgoyne and Boydell (1991):

Participative policy making;
‘Informating’: ensuring employees have access to necessary information in order to increase employee commitment levels, and in making organisational goals transparent;
Formative accounting and control: systems of accounting and budgeting structured to assist understanding and learning, and increase transparency around performance and achievement levels;
Reward flexibility: recognition that money is not the only effective reward for employees;
Enabling structures: allowing for looser structures, in line with organisational needs;
Boundary workers as environmental scanners: employees bringing in information and knowledge from the external environment;
Inter company learning: training, job exchanges, mentoring etc, in line with organisational needs;
Learning climate: normal to experiment, try out new ideas as long as it is framed within a commitment to organisational improvement;
Self-development opportunities for all: resources and facilities are made available to all members of the organisation to encourage an increase in skill development, in line with organisational needs.

Finally, for a useful summary of the wanted and unwanted practices in a learning organisation, please see figure four, as devised by Jasphahara (2004). This useful table outlines succinctly the key behaviours that can be encouraged or discouraged in order to develop a learning organisation.

Summary

It is hoped that this two-part masterclass has shed some light around the theory and the practical solutions to some of the more complex areas of knowledge management practice and change management. KM as a discipline continues to go from strength to strength as the impact that the effective management of both tangible information and tacit knowledge has on organisational success is increasingly recognised.

There is no doubt that managing knowledge offers different challenges than those raised in dealing with the effective management of information, though these two areas of practice are directly complimentary. Both KM theorists and practitioners alike, are now moving towards a firmer understanding of how this challenge can be met.

From an early diversity of material around this area, key academic theories and accompanying practitioner models are emerging, which will enable a more realistic engagement between theory and practice in this vital management area, thereby contributing to ongoing organisational success in a world where the only certainty is change.

Catherine Kelly can be contacted at the following e-mail address: c.kelly@londonmet.ac.uk

About the author

Catherine Kelly (BA, PG Dip Lib, MBA, PG Cert TLHE) is currently a senior lecturer and course director for the MSc course in Knowledge Management at London Metropolitan University. Catherine’s research interests focus on organisational culture and, in particular, the issues around successfully managing power and knowledge in implementing KM strategies. Catherine also lectures on competitive intelligence strategies and management practice.

Prior to joining the academic sector in 2004, Catherine worked as a researcher and knowledge manager in private equity, investment banking and consultancy, as well as the online sector, over a period of 20 years. Past employers include Apax Partners, JP Morgan, Deutsche Bank, Bain and Company and IDA Ireland.

Resources

-Argyris, C (2005) ‘On Organisational Learning’, Blackwell, Oxford.

-Argyris, C. and Schon, D.A. (1978) ‘Organisational Learning: A Theory of Action Perspective’, Addison-Wesley, Reading, Massachusetts.

-Buchanan, D. and Badham, R. (1999) ‘Power, Politics and Organisational Change: Winning the Turf Game’, Sage Publications, London.

-Etzioni, A. (1964) ‘Modern Organisations’, Prentice-Hall, Englewood Cliffs, New Jersey.

-Hislop, D. (2005) ‘Knowledge Management in Organisations: A Critical Introduction’, Oxford University Press, Oxford.

-Jashapara, A. (2004) ‘Knowledge Management: An Integrated Approach’, Pearson Education, Essex.

-Pedler, M., Burgoyne, J. and Boydell, T. (1991) ‘The Learning Company: A Strategy for Sustainable Development’, McGraw Hill, London

-Rousseau, D. and Anton, R. (1991) "Fairness and implied contract obligations in job terminations: The Role of Contributions, Promises and Performance", Journal of Organisational Behaviour, Vol. 12 No. 4.

-Senge, P. M. (1990) ‘The Fifth Discipline: The Art and Practice of the Learning Organisation’, Doubleday Currency, New York.

-Tam, H. (1998) ‘Communitarianism: A New Agenda for Politics and Citizenship’, Macmillan Press, Basingstoke, Hampshire.